How the Capitalist Gentlemen Hide Their Profits (On the Question of Control)

Original Russian title: Как прячут прибыли господа капиталисты (К вопросу о контроле)
Date: 1917-05-07
Source: ru:PSS/v32
Translation: AI translation by Claude (Anthropic)
Note: This is an AI-generated translation from Russian. While striving for
accuracy, readers should consult the original Russian text for authoritative
reference.
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How much is said about control! And how little content there is in all this talk. How the essence of the matter is avoided with general phrases, grandiloquent turns of speech, solemn "projects" that are destined to remain projects forever.

And the essence of the matter is that without the abolition of commercial and banking secrecy, without the immediate enactment of a law opening commercial books to workers' unions, all phrases about control and all control projects are the emptiest verbiage.

Here is a small but instructive illustration of this. One comrade, a bank employee, provides us with the following data, showing how profit is hidden in official reports.

In "Vestnik Finansov" No. 18 of May 7, 1917, the report of the Petrograd Discount and Loan Bank was published. According to this report, the net profit of the bank is shown at the sum of 13 million rubles (the exact figure equals 12.96 million; we will give figures with rounding in the text, but exact ones in parentheses).

But, looking at the report more closely, a knowledgeable person will immediately see that this is far from all the profit, that a considerable part of the profit is cleverly hidden under other headings, so that no "tax," no "forced loan," and in general no financial measure—without the complete abolition of commercial and banking secrecy—will ever catch it. Indeed, on the account of special reserve capital, a sum of 5½ million rubles is shown. It is precisely in the so-called reserve or reserve capital that profit is constantly recorded to conceal it. If I, a millionaire, received 17 million in profit, of which I "reserved" 5 million (i.e., in Russian, set aside for reserve), then it is enough for me to record these 5 million as "reserve capital," and the matter is in the bag! All and any laws about "state control," "state taxation of profit," etc. are circumvented!!

Furthermore. On the account of received interest and commission, the same report shows a sum of almost 1 million rubles (825 thousand). "The question arises," the bank employee writes to us, "what sums in general constitute the profit of the bank, if received interest is shown not on the profit account??"

Then. On the account of profit remainder from previous years, a sum of 300 thousand rubles is shown, which is not shown in the total sum of profits!! Thus, together with the previous point, more than a little million in profit turned out to be hidden. Likewise, the sum of 224 thousand rubles "unpaid dividend to shareholders" is also not included in the total sum of profits, although everyone knows that dividends are paid from net profit.

Further. The report also contains a sum of 3.8 million rubles—"transitional sums." "What these transitional sums are," the comrade writes to us, "is difficult to determine for a person who has not taken direct part in the matter. Only one thing can be said: under the name of 'transitional sums' one can hide, when composing a report, part of the profit, and then transfer it from there 'where it should go.'"

Total: profit is shown at 13 million rubles, but in fact it is probably from 19 to 24 million—up to 80% on the basic capital, which is 30 million rubles.

Is it not clear that government threats to capitalists, government promises to workers, government projects and laws on levying 90% of profit from the largest capitalists—are hollow and nothing more than hollow, as long as commercial and banking secrecy is not abolished?

Pravda No. 94, July 12 (June 29), 1917

Printed from the text of the newspaper Pravda